HONG KONG (Nikkei Markets) -- Hong Kong stocks slid on Wednesday after global markets were slammed again by fears over the spreading new coronavirus, although losses narrowed after the city announced relief measures to ease the impact from the outbreak.
The Hang Seng Index fell 0.7% to 26,696.49, after sliding as low as 26,479.90 earlier in the day. Mobile phone component suppliers AAC Technologies Holdings and Sunny Optical Technology Group slid 2.8% and 3.7%, respectively. Among heavyweights, cellular services major China Mobile dropped 2.3% and Industrial & Commercial Bank of China gave up 0.9%, while U.K.-headquartered lender HSBC Holdings slid 0.8%.
Hong Kong Exchanges & Clearing slipped 0.8% amid broad market weakness after the market operated reported, during Wednesday's midday break, a 1% increase in 2019 net profit to HK$9.39 billion ($1.21 billion) as higher investment income helped offset lower trading volumes in cash and derivatives markets.
The S&P 500 Index tumbled 3% overnight, adding to its 3.4% plunge on Monday, after U.S. health officials advised hospitals and other institutions to prepare for the spread of the coronavirus in the country, warning that an outbreak was almost a certainty.
The number of human infections outside China has reportedly reached about 2,900, with South Korea, Italy, Japan and Iran among the most affected. In addition, more than 78,000 people have reportedly been infected in the mainland, which has also witnessed more than 2,700 deaths from the epidemic.
Mainland authorities have recently stepped up measures to support the economy. The People's Bank of China and the State Council, the cabinet, have encouraged lenders to act to provide relief to small businesses in harm's way as economic conditions deteriorated.
Hong Kong on Wednesday unveiled its own relief measures, with Financial Secretary Paul Chan announcing a plan to disburse HK$10,000 ($1,283) to each of the city's permanent residents above the age of 18 to help boost consumption and ease their financial burden amid the outbreak. He forecast that the city's economy could contract as much as 1.5% or expand up to 0.5% in 2020.
Kenny Wen, wealth-management strategist at Everbright Sun Hung Kai, said the measures could perhaps help people facing difficulties but were unlikely to do much to support the broader market in Hong Kong, which is dependent on the earnings of listed companies.
"The market's preference to avoid risk is very obvious," he said. If fund managers were to avoid all risk, they were unlikely to buy shares, which would apply pressure on each and every global market, Wen added.
In mainland markets, the Shanghai Composite Index retreated 0.9%, while the yuan traded onshore slipped 0.1% to 7.0208 against the U.S. dollar.
Gemdale Properties & Investment jumped 8.4% after the company said it expects last year's net profit to have jumped by more than 65%, while property developer China Aoyuan Group gained 5.1% after estimating that its profit last year likely increased by more than 50%.
ASM Pacific Technology, which makes equipment for the semiconductor industry, slid 3.2% amid a weak broader market although the company reported an increase in net profit for the quarter ended Dec. 31.
-- Benny Kung